- Two of China’s largest asset management firms just filed their applications for spot Bitcoin (BTC) exchange-traded funds (ETFs) in Hong Kong.
- Harvest Fund and Southern Fund, with combined assets under management (AUM) of over half a billion dollars, are the new prospective entrants in the market.
- This comes against the backdrop of mainland China’s restrictions on cryptocurrencies.
Harvest Fund and Southern Fund Filing for Spot Bitcoin ETFs in Hong Kong
In yet another win for the cryptocurrency community, China’s financial powerhouses, Harvest Fund and Southern Fund, have filed their applications for a spot Bitcoin ETF in Hong Kong through their subsidiaries within the jurisdiction. This surely comes as big news to the industry because the two are considered to be among the largest asset managers in China, and due to the fact that they originate from a country that has shown hostility toward Bitcoin over the past couple of years.
According to Bitcoin Magazine, Harvest Fund possesses more than $230 in assets under AUM while Southern Fund holds over $280 billion AUM. Although these are not as big as the likes of Wall Street heavyweights BlackRock and Fidelity, the event further displays the growing institutional adoption of Bitcoin and it hints at a softening stance of one of the world’s largest economies toward the leading cryptocurrency by market cap.
The verdict for all pending spot Bitcoin ETF applications in Hong Kong is expected to arrive as early as the second quarter of 2024. Their approval is not set in stone but analysts are optimistic about their prospects, especially with the success their Western counterparts have exhibited since they were greenlit by the US Securities and Exchange Commission (SEC) on January 11.
So far, the biggest player in the US spot Bitcoin ETF market remains to be BlackRock. The iShares Bitcoin Trust (IBIT) has already processed over $13.5 billion inflows in the first 11 weeks of its trading alone.
China’s Bitcoin Ban
Make no mistake, Bitcoin is still banned in mainland China and strict controls are applied on the movement of capital across borders. Despite this, the cryptocurrency sector somehow operates within a grey area in the giant Asian nation because people are able to trade the digital asset as well as other tokens on crypto exchanges like Binance and OKX based on a report by Reuters.
Other registered over-the-counter channels are also available to process crypto transactions. Meanwhile, China-based investors have found a way to acquire digital currencies through overseas bank accounts.
In the case of Hong Kong, China has always been behind its move to become a crypto hub with its silent blessing.